Logo
Munich Personal RePEc Archive

Financial Crises, Development, and Growth: A Long-term Perspective

Reinhart, Carmen and Reinhart, Vincent (2015): Financial Crises, Development, and Growth: A Long-term Perspective. Published in: World Bank Economic Review , Vol. 29, No. 1 (April 2015): pp. 1-24.

[thumbnail of MPRA_paper_64488.pdf]
Preview
PDF
MPRA_paper_64488.pdf

Download (175kB) | Preview

Abstract

Observed over long periods, the upward path of the output of most economies occasionally takes jagged steps down. More often than not, these events are associated with a variety of crises, including systemic banking stresses, exchange rate crashes, a burst of inflation, and a restructuring or default on sovereign debt. Using a large panel of countries over a long period, we document that crises are typically associated with lower medium-term growth. That may be a direct causal channel, a reverse channel, or the influence of some other factors on both growth and finance. But they tend to go together. Given that the forces for convergence of income across countries are estimated to be slow, going off track around a crisis will likely have long-lived consequences for relative economic development.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.